As a cynic who is constantly looking for ways for human structures to fall to pieces, I'd be very worried about the large-company politics of a center-of-excellence/"honors college". When you set up a CoE, the rest of the organization feels put out.
If you put some set of people into R&D roles where they have full autonomy, then everyone wants it. The "Real Googler" issue (~10% of engineers have 20%T and the freedom to move around the company; the rest have manager-as-SPOF bullshit) is definitely a source of resentment at the Big G.
If you're going to do that, then have open allocation for all engineers. It's a much ballsier step, but it avoids resentment of the "special friends club" that gets to do cool R&D and that the rest of the company ends up undermining.
Whilst I generally agree with your view on innovation and the whole "special friends club". But 20% time wouldn't counter the innovator's dilemma: there will still be established power structures in place, reaching to the top levels of the business, who have a vested interest in their status quo (and that doesn't mean no innovation - they can still be innovating), who will fight disruptive innovation. Google seems particularly rife with this!
The value in a incubator, new product development group, or "spin out", (don't think any CoE I've seen fits this model...), is that they have top level sponsorship to go outside of normal process for: hiring, sales, tools, platforms, etc. as required, and just build new stuff. If that's disruptive in the short term, C-levels should be pushing it through for long term gains.
You also place a lot of trust in engineers to have Clue about what to work on. Most will have ideas, many of those ideas would be a very poor use of the companies resources. If those guys feel strongly, they should spin out, and pitch to their old senior execs for seed funding. They'll soon find out if their idea has legs...
If you put some set of people into R&D roles where they have full autonomy, then everyone wants it. The "Real Googler" issue (~10% of engineers have 20%T and the freedom to move around the company; the rest have manager-as-SPOF bullshit) is definitely a source of resentment at the Big G.
If you're going to do that, then have open allocation for all engineers. It's a much ballsier step, but it avoids resentment of the "special friends club" that gets to do cool R&D and that the rest of the company ends up undermining.